As we may all know Cigna is working to be acquired by Anthem, which would be a huge acquisition. As you may or may not know, Cigna’s pharmacy benefit manager now is OptumRX, the PBM subsidiary of United Healthcare. This occurred when Optum purchased Catamaran PBM in 2015 and both have been merged in to OptumRX as the Catamaran name goes away. There’s a lot of this taking place with the zillions of subsidiaries of United Healthcare too, so it making it harder to see the specific subsidiaries and what they do with United in putting money to the bottom line.

In other news on the Pharmacy Benefit Manager purchase, Independent pharmacists filed a class action lawsuit against Catamaran. Can you guess why? The independent pharmacists are getting lowballed. They might seem to fit the United Healthcare model of Ingenix, now called Optum Insights that lowballed MDs on payments for 15 years and had many law suits filed against them. Just as a side note, Obama nominated Andy Slavitt to run CMS, and he was the CEO of Ingenix, the low balling company, do we want him at CMS?

So with this situation occurring and as I understand it, Cigna signed a 10 year agreement to be the Cigna PBM and it’s about 2 years into the contract. This could make Cigna even more anxious to get the Anthem acquisition take place. When you have a giant insurance competitor now running your pharmacy benefits (OptumRX who also likes to make money with drugs) you have one huge company getting a strangle hold here. If the acquisition of Cigna by Anthem could take place, then the underwriting could change the policies to be at least on paper, underwritten by Anthem and then Cigna could ditch the United Healthcare owned OptumRX. United Healthcare did that a few years ago with buying out the Health Net northeast business, underwrote the policies and let Health Net manage and keep the name, so folks may not have been aware that for a few years, their Health Net policy was underwritten by United Healthcare. The link below is from the archives and explains how this came about over the Tri-Care contract bidding, which is coming up again soon.

So the real story here is we have the work of expensive quants working on policies today, sometimes stomping all over the actuaries as the quant models are directed at profit as a priority. The machines run the healthcare business anymore. BD

Cigna Corp. announced Friday that it is temporarily banned from enrolling new customers in its Medicare Advantage and standalone prescription-drug plans following an October audit from the US Centers for Medicare and Medicaid Services (CMS).

In a letter dated January 21, the CMS reported that “widespread and systemic failures” at the insurer resulted in customers being denied medical coverage and prescriptions they rightly had access to. After customers filed grievances about being inappropriately denied services, Cigna failed to properly address those complaints, the CMS said.

Dark Arts of Mathemical Deception

Professor Charlie Siefe of NYU, a mathematician debunks clinical trials, and few other items to where data is spun and fools you, every day example, hear about the perfect butt algorithm and more. These are probably some things you have never thought about but again after listening to what he has to say, it’s time to think about being skeptical. Here’s a radio show that also talks about the same topics.

This video digs in a bit further with how fictitious business models are used by banks and companies do this too. The models are so complex that CEOs don’t even understand them. “Quants, The Alchemists of Wall Street will take you through how “math models” work at banks and financial institutions in a way that even the layman can understand. More videos like over at theAlgo Duping/Killer Algorithm Page. Bank of America will also tell you“IT’ is a business” how they make money.

Weapons of Math Destruction

This is a lecture where Kathy O’Neill, a former Quant who worked for a Hedge Fund (Weapons of Math Destruction) on Wall Street will tell you what is done with your retirement money and more. The banks and companies use technology to take advantage because they can. “Of course we are going to take advantage because our tools are our brains…if they could figure out a way to take advantage of pension funds they would, a good interview with explaining smart money and dumb money.

Algorithms Shape The World

This is a very good presentation done a TED Conference and really was the one that got everyone started thinking about algorithms and today it’s talked about a lot. As he says “if you’re an algorithm, life is looking pretty good, but can’t say the same for humans”. What is a black box? Nobody has any control over the flash crash. We have moved forward a bit but still we are writing the unreadable and lost the sense of some of what is happening. Nice plug for Nanex here with research.